Personal Finance

More lessons of home ownership

“Learn from the mistakes of others; you can’t live long enough to make them all yourself!” – Eleanor Roosevelt

I am writing this surrounded by boxes and a to-do list that is still a mile long. This week I am leaving the world of homeownership and moving out of the house I bought three years ago. I couldn’t be happier! Last week I wrote about two of the lessons I’ve learned from buying my first home and this week I wanted to share three more lessons on homeownership.

Expect the unexpected

No matter how thoroughly you research or how carefully you budget, there’s a really good chance that anything related to homeownership and home renovations will cost more than you expected. This is especially true if you purchase a home that you know is a “fixer-upper”. A friend told me that planning to spend 50% more on your projects than you budgeted is a good rule of thumb and, having done my fair share of projects over the past three years, I’d tend to agree. I found that even the projects that were completed within budget tended to inspire others that I hadn’t even considered – new flooring in the bathroom led to new paint on the walls which in turn led to fresh trim and new hardware. It’s easy to get carried away and find yourself in a situation where, in order not to leave a project half-finished, you have to spend more than you’d planned and if you’re not careful those bills can get out of control.

This lesson also applies to make sure that if your household income drops you can still afford to stay in your home. Many first time home buyers decide to start a family shortly after buying a home and find themselves more affected than they expected by the drop in income that occurs when one partner is on parental leave. In my case the unexpected was a double hitter; within 4 months of buying my home my marriage was over and I’d been laid off from a job that I thought was secure. Life throws curves and sometimes you need a big bat and a killer swing to conquer them!

Increase your contingency fund

Once you become a homeowner you become responsible for expenses you may never have considered when you were renting or living at home. Property Taxes, Water/Utility bills and the cost of replacing anything that breaks down such as a furnace, water heater or plumbing all need to be accounted for when you look at how much you need to put into a contingency fund for unexpected expenses. It’s worth doing the research and perhaps asking the seller for copies of their most recent summer and winter bills to get an idea of exactly how much you need to budget for each month. I was lucky that my house was pretty economical to run and the expenses didn’t vary too much from season to season but what pushed my decision to sell was the realization that I was living in an older home and if anything expensive did go wrong it would seriously compromise my ability to achieve the goals I had set myself for the end of 2014. At the end of the day, my desire to stay in the house wasn’t strong enough to outweigh the risk that I wouldn’t hit my goals and so a decision to sell was made.

You can do more than you think you can

My final lesson is a positive one; basic home Renos are much more straightforward than you might think. I’m not claiming to be a professional (I have highly proficient friends who would support this!) but over the past three years, I’ve managed to lay hardwood and laminate flooring, replace trim, hang wallpaper, paint and create all manner of décor items including some very lovely mirrors that I will be sad to leave behind. It’s amazing what you can do when you put your mind to it and how many economical ways there are to make an aesthetic difference to your home. I’ve discovered that one person’s trash is indeed another person’s treasure!

As I look back on the past three years I am thankful for the experience of homeownership. I have learned so much about homeownership and although some of the lessons have been painful I know that they will serve me well in the future. My current plan is to rent for 18 months but to budget as if I was still a homeowner; plowing everything I save through renting into savings in order to hit the very big goals I have set for myself to achieve by December 2014. It’s an exciting time!

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